Groupon is all the rage at the moment, with around 50 million active customers, it is certainly doing something right. The site provides its users with thousands of coupons and daily deals, all of which save the end user money, and provides business for the company supplying the discount. Groupon will also get a cut of any of the sales made. It’s a win-win for all parties involved.
People can get deals on a huge range of products and services, from physical goods to meals, experiences, event tickets and more. Since its launch in 2008, Groupon has been extremely successful.
For a business, there are many reasons to use Groupon to sell your product or service. Let’s take a look at a few.
1. A Form of Advertising – Many companies use Groupon purely as a form of advertising. By having their business and brand on the site, it will be seen my thousands, potentially millions of people, many of which will be their target market.
To customers that are unfamiliar with what you offer, this is a great way to show them. In addition to promoting the brand as a whole, specific products can be pushed by giving a discount. Brands need to be careful that they don’t use the site too often as it will limit their ability to make a profit.
2. Attracting Customers – Groupon can help to attract customers, both old and new. Current customers may search Groupon specifically to find a company that they like to see if they have any deals. New customers can be reached by offering them a chance to save some money and grab themselves a bargain.
Once a new customer has made a purchase, if they like what they get, then it is probable that they will continue to make purchases from the brand and potentially will tell others about the great service they have received.
3. Moves Inventory – If a company has a specific service or product they are struggling to ship off the shelves, then Groupon offers a way to sell it at a discounted price to a large audience. Even if a large profit is not made from selling the goods in this way, the other benefits of using Groupon will also be obtained such as the advertising potential.
Although there may be a lower profit margin, brand might be able to make a lot of money due to the increased volume of sales.
4. Follow Up – Some businesses will take advantage of Groupon sales even further by capturing the customers’ email addresses when they have made a purchase. There is also the opportunity to obtain other customer information. They are then able to follow up the sale with newsletters and special offers which may encourage the customer to make further purchases.
5. Up-selling – Some businesses that use Groupon will use it as a way to up-sale other similar products or offer add on options. For example, offering a computer at a discounted rate on Groupon may then lead to the sale of printers, speakers and other computer accessories.
If a customer purchases a weekend away on the site, she may be enticed to upgrade the holiday and make further sales from the company.
There are a huge range of benefits that come from using Groupon for all parties involved, therefore it comes as no surprise that its success is showing no sign of slowing.